Corbett & Dullea Realty, LLC v Muss Dev., LLC

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Corbett & Dullea Realty, LLC v Muss Dev., LLC 2020 NY Slip Op 33089(U) September 17, 2020 Supreme Court, New York County Docket Number: 655369/2017 Judge: Debra A. James Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 INDEX NO. 655369/2017 RECEIVED NYSCEF: 09/18/2020 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: PART HON. DEBRA A. JAMES IAS MOTION 59EFM Justice --------------------------------------------------------------------------------X CORBETT AND DULLEA REAL TY, LLC, INDEX NO. MOTION DATE Plaintiff, MOTION SEQ. NO. 655369/2017 03/17/2020 002 -vMUSS DEVELOPMENT, LLC, 1459 THIRD AVENUE LLC, and 1459 3RD RE ASSOCIATES, DECISION + ORDER ON ·MOTION Defendants. -----------------------------------------------------------------------X MUSS DEVELOPMENT, LLC and 1459 THIRD AVENUE LLC, 1459 3RD RE ASSOCIATES, Third-Party Index No. 595990/2018 Third -Party Plaintiffs, -againstVCPRE LLC and Y7 MANAGEMENT, LLC Third-Party Defendants. ---------------------------------------------------------------------X The following e-filed documents, listed by NYSCEF document number (Motion 002) 40, 41, 42, 43, 45, 46,47,48,49, 50, 51, 52, 53, 54, 55, 57 DISMISSAL were read on this motion to/for ORDER Upon the foregoing documents, it is ORDERED that the motion to dismiss third-party complaint is denied; and it is further ORDERED that counsel are directed to submit to 59nyef@nycourts.gov and to file with NYSCEF a proposed discovery status conference order or a counter proposed status conference order on or before October 23, 2020. 65536912017 CORBETT AND DULLEA REAL TY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 1 of 13 Page1 of13 [*FILED: 2] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 INDEX NO. 655369/2017 RECEIVED NYSCEF: 09/18/2020 DECISION In this Realty LLC action, first-party (Corbett), plaintiff a real estate broker, defendants/third-party plaintiffs Muss 1459 Third Avenue, LLC (1459 Third), Corbett and Dullea brings suit against Development, LLC (Muss), and 1459 3rd RE Associates (1459 3rd RE) for breach of implied cont:::act and unjust enr!chment. Corbett alleges that it was the procuring cause of a lease entered into between defendants 1459 Third and 1459 3rd RE, as landlord and owner, and third-party defendant Y7 Management, LLC (Y7), as tenant, and is thus entitled to a brokerage commission. After Corbett filed its action, defendants/third-party plaintiffs then commenced a third-party action against third-party defendants Y7 and VCPRE LLC (VCPRE), its real estate broker, for indemnification. VCPRE now moves, pursuant to CPLR 3211 (a) (7), for an order. dismissing the third-party action as against it (NYSCEF Doc No. I I 4 0) • As set forth below, the motion to dismiss shall be denied. Background Accepting the allegations set forth in both the amended ! ~ I' complaint (NYSCEF Doc No. 7) and the third-party complaint (NYSCEF Doc No. 42) as true (Leon v Martinez, 84 NY2d 83, 87 [1994]), the ) following facts emerge. ) 2 of 13 655369/2017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Paae 2of13 [*FILED: 3] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 INDEX NO. 655369/2017 RECEIVED NYSCEF: 09/18/2020 1459 Third and 1459 3rd RE, through Muss, their agent, rented the 4th and 5th Floors in the building known as 1459 Third Avenue, New York, New York 10028 (the subject premises) to Y7, pursuant to a written lease (the Lease [NYSCEF Doc No. 53]), dated May 11, 2016, between 1459 Third Avenue and 1459 3rd RE, as landlord, and Y7 as tenant, for a term which commenced on August 1, 2016, and is set to expire on July 31, 2026 (third-party complaint, 'II 10). VCPRE was the broker for the Lease and represented that it was the sole and only broker for the Lease (id., 'II 11). Paragraph 75 of the rider to the Lease states: "The Tenant represents and warrants that it has dealt with no broker of any kind other than [VCPRE] and agrees to indemnify and hold the Landlord harmless from any claims of any broker, including all costs reasonably incurred in defending the same which may arise by reason of Tenant having dealt with any broker in connection with this lease. Landlord agrees to pay to VCPRE LLC a commission in connection with this lease pursuant to a separately negotiated agreement" (Lease, 'II 75). Prior to the execution of the Lease, VCPRE executed a separate brokerage agreement, dated April 28, 2016 (the Brokerage Agreement [NYSCEF Doc No. 54]), regarding the brokerage fee to be paid to VCPRE for the leasing of the subject premises to Y7 complaint, 'II 13). (third-party Paragraph 3 of the Brokerage Agreement provides: "The undersigned broker warrants and represents that the undersigned, to the best of its knowledge, is the sole broker in any wise instrumental in consummating the Lease and the prior negotiations 655369/2017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 3 of 13 Page 3of13 [*FILED: 4] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM INDEX NO. 655369/2017 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 thereto, and agrees to hold Owner harmless and indemnify Owner from and against any and al+ damages, liabilities, costs, and expenses (including attorneys' fees) arising out of or in· connection with any claims by any other broker(s), such indemnification to be limited to the extent of comrr'cissions received by Broker under this Agreement" (Brokerage Agreement, ~ 3 [italics .added as emphasis). Y7 took possession of the subject premises pursuant to the terms of the Lease, and 1459 Third and 1459 3rd R2 paid the agreedupon commission to VCPRE (third-party complaint, ~ 13). Thereafter, Corbett commenced the first-party action, seeking to recover a brokerage commission that Corbett claims it is owed from defendants/::hird-party plaintiffs leasing of the subject premises to Y7. in connection with the In the amended complaint, Corbett alleges that it was the "procuring cause" of Y7 renting the subject premises from defendants/third-party plaintif because it identified the subject building for Y7, identified the 4th and the 5th Floors in the subject building as the location to rent af::er touring the subject building with Y7, usage of the space with discussed the defendants/third-party plaintiffs, negotiated rent and other leasehold terms with defendants/thirdparty plaintiffs, and provided them with information regarding the prospect tenant's financial status. Specifically, Corbett alleges that, in or around May 2015, Y7 contacted it about finding New York locations for a yoga studio, 55536912017 CORBETT ANO DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 4 of 13 Page4ol13 [*FILED: 5] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 in INDEX NO. 655369/2017 RECEIVED NYSCEF: 09/18/2020 particular a location (amended complaint, i on the 6) . Upper East Side of Manhattan Corbett further alleges it identified the subject building and arranged with Muss for Y7 to tour the building for available spaces · (id., i 7) . Accordir.g to Corbett, Y7 expressed a desire to rent the 4th and 5th Floors of the subject building rent the i 8). Corbett submitted an offer to Muss for Y7 to ect premises, which purportedly included a provision for the landlord to pay a full brokerage commission. was rejected. 2015, which This offer Corbett then submitted a higher offer on July 13, also purportedly included the provision landlord was to pay a full brokerage commission (id., i rejected this second offer, that 9). the Muss purportedly on the grounds that it wanted a "more conventionaln tenant, that it was worri~d about the noise that might be created by Y7, and that it was concerned about a tenant leasing two floors (id., i 10). Corbett was later informed by a letter from Y7's counsel that it toured the subject premises again in January of 2016, six months after touring them with Corbett, and entered into the Lease for the subject premises in May of 2016 (id., i that defendants/third-party plaintiffs 11). have Corbett alleges failed to pay any brokerage co::nmission to it, and that it is owed a full commission in the amount of $100,64l.OO as a result it being the "procuring cause" of Y7 entering into the Lease for the subject premises (id., i 13) . 65536912017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 5 of 13 Page 5of 13 [*FILED: 6] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM INDEX NO. 655369/2017 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 Defendants/third-party plaintiffs deny that they entered into any agreement with Corbett for brokerage services for the subject premises, and never retained it to provide any services. They further deny that they owe Corbett a brokerage fee. Defendants/third-party plaintiffs contend that, even if Corbett were entitled to a brokerage commission for the leasing of the subject premises to Y7, pursuant to the terms of paragraph 75 of the Lease and paragraph 3 of the Brokerage Agreement, VCPRE and Y7 represented that VCPRE was the only broker involved .in the leasing of the subject premises to Y7, and that VCPRE and Y7 would hold defendants/third-party plaintiffs harmless and indemnify them from and against any and all (including expenses damages, attorneys' fees) liabilities, costs, arising of connection with any claims by any other broker. accordingly, pursuant out or and in They contend that, to the Lease and the Brokerage Agreement between the parties, Y7 and VCPRE are liable for any brokerage fee claims made by Corbett, together with the reasonable value of the legal fees, costs and expenses incurred by defendants/third-party plaintiffs in defending the Corbett action. After the complaint defendants/third-party was plaintiffs complaint against VCPRE and Y7. initiated then served by a Corbett, third-party Both VCPRE and Y7 failed to answer the complaint, and defendants/third-party plaintiffs moved for a default judgment. Defendants/third-pari::y plaintiffs 655369/2017 CORBETT ANO DULLEA REALTY. LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 6 of 13 agreed Page6of 13 to [*FILED: 7] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 INDEX NO. 655369/2017 RECEIVED NYSCEF: 09/18/2020 vaca;:e the default judgment, and VC?RE then made the instant motion. Discus It is firr.il.y established that, cor.iplaint pursuant to CPLR 3211(a) on a to· dismiss a (7), the court must accept the facts as alleged in the complaint as true, the motion accord the plaintiff t of every possible favorable inference, and determine only whether the facts as alleged fi;: within any cognizable legal theory Landon v ~roll Lab. Specialists, Inc., 22 NY3d 1, 5-6 [2013]; Goshen v Mutual Life Ins. Co. of N. Y., [2002]; suora, 84 NY2d at 87). a cogni 98 NY2d 314, 326 The sole inquiry is whether legal theory is contained in the pleading, not whether there is evide!l::iary support or whether the claimant can ultimately succeed on the merits Gate Yacht Club, Beach, LLC v 2008]). (African Diaspora Mari time Corp. v Golden 109 AD3d 204, ZC Specialty Ins. 211 . [l5t Dept 2013]; Co., 55 AD3d 493, Philips S. 497 [1st Dept If tl::e four corners of the complaint provide poten::ially meritorious claims, the motion to dismiss should be denied (see 511 West 232nct Owners <:;grp. v Jennifer Real.ty Co., 98 NY2d 144, 152 [2002]). "'However imperfectly, informally, or even illogically the fac;:s may be stated, a complaint, attacked for insu must be deemed to al whatever can be state:r.ents by fair and reasonable intendment'" 65536912017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 7 of 13 implied ciency, from its (Feinberg v Bache Page 7of13 [*FILED: 8] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM INDEX NO. 655369/2017 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 Halsey Stuart, Inc., 61 AD2d 135, 138 [Pt Dept 1978] [citation orr.i t ted] ) . Ccnstruing the third-party amended complaint in the generous matter to which it is entitled, this court concludes that the third-party complaint contains sufficient allegations to withstand dismissal. On this metier., the main issue before this court is whether the indemni cation agreement entered into by VCPRE is binding and In support of its motion to dismiss, VCPRE contends that valid. "[u]nder the indemnity clause, it is clear that the clause does not cover the facts of this case, where there are claims by a broker, unaffiliated with VCPRE, who had dealings with Third-Party ten Plainti months (affirmation of David S. 26). VCPRE further prior to Schwartz, contends VCPRE Esq. that [NYSCEF Doc No. "[n]othing in the indemnify Third-Party Plaintiffs for 41], 'll indemnity states that provision between VCPRE and Third-Party Plaintif VCPRE will involved" becoming conduct solely caused by Third-Party Plaintiffs and which took place well before any conduct whatsoever was undertaken by VCPRE" (id., 'll 27). The court rejects these arg·.iments. "'It complete, is well clear and settled that unambiguous a on written its agreement face must be which is enforced according to the plain meaning of its terms'" (Sullivan v Harnisch, 96 AD3d 667, 667 [ Dept 2012] [citation omitted]; Greenfield ·v 65536912017 CORBETT ANO DULLEA REALTY, LLC vs. MUSS DEVELOPMENT. LLC Motion No. 002 8 of 13 Page 8of13 [*FILED: 9] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 Philles Records, 98 NY2d 562, 569 (2002] . . must be enforced according to the see~ (1977] INDEX NO. 655369/2017 ["a written agreement . pl~in meaning of its terms"]; Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153, 159 [where lease or other contract is negotiated between two sophisticated business ent~ties, it suffices that agreement betweer: parties connotes an intention to indemnify which can be clearly implied from language and purpose of entire agreement]). "Construction of an unambiguous contract is a matter of law, and the intention of the parties may be gathered from the four corners of the instrument and should be enforced according to its terms" (Beal Sav. Bank v Sommer, 8 NY3d 318, 324 (2007]). In interpreting a contract, courts "should examine the entire contract and consider the relation of the parties and the circumstances under which it was executed" (Kass v Kass, 91 NY2d 554, 566 [1997] [internal quotation marks and citation omitted]). "Particular words should be considered, light of the not as if isolated from the context, obl~gation as manifested thereby. a sensible meaning as a whole and the intent~on of the parties Form should not prevail over substance and of words should be sought" quotation marks and citation omitted] ; see Inc. (1990] v Giancon.tieri, but in the 77 NY2d 157, :'-63 (id. [internal W.W. W. As soc. , [when the parties dispute the meaning of a particular contract clause, the task of the court is to determine whether such clauses are ambiguous when "read in the context of the entire agreement"]). 65536912017 CORBETT ANO DULLEA REALTY, LLC Motion No. 002 vs. MUSS DEVELOPMENT, LLC 9 of 13 Page 9of13 [*FILED: 10] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM INDEX NO. 655369/2017 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 This court construction, finds the that, under these principles of contract indemnification provision is valid, as the express language of that provision demonstrates that it was clearly contemplated by the parties that if a claim was made with respect to prior negotiations, VCPRE agreed to indemnify defendants/thirdparty plaintiffs. VCPRE acknowledges that it entered into the Agreement with defendants/third-party plaintiffs. Agreement specifically provides that VCPRE represents" that it is the "sole broker in Brokerage The Brokerage "warrants and consummating the Lease and the prior negotiations thereto," and agrees to hold the Owner harmless and indemnify it from any damages or liabilities arising out of any claims "by any other broker(s) ." Thus, contrary to VCPRE's allegations, it is clear from the unambiguous language of the indemnification provision that. the indemnification extends to any prior negotiations with respect to the leasing of the subject premises to Y7, and that thus, if Corbett is successful in the main action, fees (see 360 [1st .§_.__g_._ Dept VCPRE would be liable for Corbett's brokerage Julien J. Studley, Inc. v Coach, Inc., 3 AD3d 358, 2004] [recognizing identical indemnification provision as valid: "the lease entered into between Coach and the landlords expressly indemnifies the landlords against claims for brokerage commissions made by any broker claiming to Coach"]; see also Gilligan v CJS Bldrs., 178 AD3d 566, 655369/2017 CORBETT AND DULLEA REAL TY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 10 of 13 represent 567 [ist Page 10 of 13 [*FILED: 11] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 Dept 2019] full INDEX NO. 655369/2017 [third-party plaintiff "established its entitlement to cotitractual indemnification from (third-party defendant) pursuant to the express terms of its indemnification agreement"]; Sanchez v 404 Park Partners, LP, 168 AD3d 491, 493 [1st Dept 2019] [same]). In its reply affirmation (NYSCEF Doc No. 48), VCPRE contends, for the first time, that third-party plaintiffs "fail[] to state a claim that VCPRE should indemnify Third-Party Plaintiffs because Third-Party Plaintiffs never alleged that VCPRE's Agent had authority to bind VCPRE to the 2016 Indemnification Clause" (reply ~ affirmation, 23). VCPRE argues that, as a principal, it cannot be held liable for the unauthorized act of its agent (id., ~ 14, citing Edinburg Volunteer Fire Co., Inc. v Danko Emergency Equip. Co., 55 AD3d 1108, that, in the 1110 VCPRE further argues [3rd Dept 2008]). third-party defendants/third-party complaint, plaintiffs "did not allege at all that they made any inquiry of VCPRE as to the scope of VCPRE's Agent's authority to bind VCPRE to the 2016 Indemnification Clause" (id., ~ 18), and "did not allege at all that VCPRE indicated in any way, by·words or conduct, that its Agent had apparent or actual authority to bind VCPRE to the 2016 Indemnification Clause" (id., However, "the function of a ~ 20). reply affidavit is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support 655369/2017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 11 of 13 Page 11of13 [*FILED: 12] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM INDEX NO. 655369/2017 NYSCEF DOC. NO. 59 RECEIVED NYSCEF: 09/18/2020 of the motion" Dept (Ritt v Lenox Hill Hosp., 1992]; see Communications, 'avail also LLC, 22 Eujoy NY3d (the moving party) 182 AD2d 560, Realty 413, Corp. 422-423 to shift to v [2013] 562 Van [1st Wagner ["it does not (the nonmoving party), by way of reply affidavit, the burden to demonsirate a material issue of fact at a time when (the nonmoving party) has neither the obligation nor the opportunity to respond absent express.leave of court'"] [citation omitted]). Therefore, VCPRE has waived this argument because it raised it for the first time on reply, and this court may not consider the merits of its new argument· (Center for Independence of the Disabled v Metropolitan Transp. Auth., 184 AD3d 197, 209 2020]; 416 W 25th St. 182 AD3d 432, Bridgestreet 2020]; 433 v Residential Bd. AD3d 422, 423 [1st Dept Corporate Dookhie Lender LLC v 416 W. 2020]; Hous., Woo, 180 of Mgrs. 47 LLC, AD3d E. 25th St: Assoc., 34th St. 180 AD3d 459, of Platinum v [1 5 t Dept 525, 464-65 (NY), 526 [1 5 t 46th St. L.P. [1 5 t Dept Dev., LLC, v Dept 2020]; LLC, 154 [1st Dept 2017]). In any event, even if the court were to consider VCPRE's new argument, its attorney's conclusory allegations, As such, reply affirmation contains only vague and is uninformed by personal knowledge. it is insufficient to support the motion to dismiss (see Manhattan Film v Entertainment Guars., 156 AD2d 152, 153 [1st Dept 1989]). 655369/2017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 12 of 13 Page 12of13 [*FILED: 13] NEW YORK COUNTY CLERK 09/18/2020 04:44 PM NYSCEF DOC. NO. 59 INDEX NO. 655369/2017 RECEIVED NYSCEF: 09/18/2020 Accordingly, the motion to dismiss shall be denied (see Breed Abbott & Morgan v Hulko, 139 AD 2d 71, 73 [l•t Dept 1988], affd 74 NY2d 686 [1989] [denying motion to dismiss, because "(a)pplying the normal rules of construction of a contract, indisputably clear provisions the broad that it would appear of the indemnification agreement included the right of Breed, Abbott to recover the legal expenses incurred in defending a lawsuit by one of the parties to the contract that resulted· in a determination that Breed, Abbott had acted appropriately in accordance with its contractual responsibilities"]). The court has considered movants' ·remaining arguments and finds them to be unpersuasive. 9/17/2020 r OATE CHECK ONE: APPLICATION: CHECK IF APPROPRIATE: ~ CASE DISPOSED GRANTED 0 · DENIED oRA A. irME:J.s.c. NON-FINAL DISPOSITION GRANTED IN PART SETTLE ORDER SUBMIT ORDER INCLUDES TRANSFERIREASSIGN FIDUCIARY APPOINTMENT 655369/2017 CORBETT AND DULLEA REALTY, LLC vs. MUSS DEVELOPMENT, LLC Motion No. 002 13 of 13 0 0 OTHER REFERENCE Page 13of13

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